Why Grindr’s largest shareholders want to take the company private
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Grindr’s days as a public company could be numbered.
The hookup and dating app, which went public via a special purpose acquisition company (SPAC) merger in fall 2021, announced on October 14 that its largest shareholders, Raymond Zage and James Lu—who led the company’s go-public efforts—were exploring the possibility of acquiring Grindr’s outstanding stock, which would take the company private again.
The confirmation of Lu and Zage’s goal of taking the company private followed reporting on October 13 from Semafor, which outlined that a recent Grindr stock slide led a lender to seize shares that at least one of the men had used to back a personal loan.
Semafor reported that the two were in talks with Fortress Investment Group to take on debt that would allow them to buy out Grindr at $15 per share. Grinder stock (NYSE: GRIND) closed at $12.72 per share on October 15.
Grindr declined to comment on the buyout effort beyond its released statement. Fortress Investment Group declined to comment.
Zage—the Singapore-based CEO of investment firm Tiga Investments—and Lu, a former Amazon and Baidu executive, collectively control more than 60% of the company’s shares. Because Lu is Grindr’s board chair and Zage sits on the board, the company said it had established a committee of independent directors to evaluate any potential future offer.
Highs and lows
This year has been a mixed bag for Grindr’s stock price.
In June, it hit its highest price since going public, rising to $24.73 per share. Since then, it has been on the downswing, dropping 12%. The stock has dropped 3% in value since early September, when Ningi Research—which bills itself as doing “investigative reporting on public companies”—revealed a short position on Grindr. (Ningi Research has also released reports this year on coconut water company Vita Coco and financial services company Marex alongside short positions on both companies.)
Ningi’s report outlined allegations that Grindr is manipulating its user numbers due to a change in how it counts paid users. Other allegations in the report include that the app’s core experience is being diluted by its efforts to broaden its offering into a “global gayborhood in your pocket.”
Grindr declined to comment on the Ningi report.
In its latest earnings report in August, Grindr posted a 27% year-over-year increase in revenue for its second quarter. Alongside Grindr’s Q2 earnings, CEO George Arison debuted his plan to start adding more AI-powered features for the app’s highest-paying users, rebuilding the app around gAI (pronounced “gay I”).
Also this year, Grindr has been undertaking its first foray into telehealth. In May, the company unveiled Woodwork, a direct-to-consumer service for erectile dysfunction medications.
As Arison told Fast Company at the time, he has viewed Grindr’s success as a public company as a way to push for more broad acceptance of the LGBTQIA+ community. “Part of our mission,” he said, “has to be we do super well as a business and we force everybody to change.”
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